Neiman Marcus posts sales rise as it invests in online growth
The luxury goods retailer recorded a 4.2% rise in comparable revenue in the first quarter of 2018, which it attributed to its ‘digital first strategy’ and new technology investments. Quarterly revenue rose to $1.12 billion, up 3.8% from $1.08 billion a year ago.
The group’s quarterly net loss grew from $23.5 million for the first quarter of fiscal year 2017 to $26.2 million as debt and previously accrued losses continued to weigh on the business, but CEO Karen Katz was upbeat as she said the digital-first strategy had started to see results.
“We remain focused on driving our digital business,” she said via conference call on Tuesday, adding that plans to improve the digital luxury experience will see new software tools introduced in order to elevate online platform performance. Mobile conversion, on-site personalisation and speed will all receive attention.
The Dallas-based group, which owns MyTheresa.com and Bergdorf Goodman, first unveiled its ‘digital-first’ strategy in October 2017 as the consumer shift to online purchasing continued to take a toll on profits. The strategy aimed to “further [the group’s] leadership position in the luxury retail space by anticipating customers’ evolving behaviours and engaging them more deeply to drive traffic online and in stores,” according to a statement made at the time. The strategy will provide the group with enhanced data and analytics on customer preferences and behaviour. The group’s online business, which reached $361 million in the first quarter, now accounts for 32% of its total revenue.
Innovation in see-now-buy-now merchandising alignments has also contributed to the group’s positive sales this quarter, as women’s apparel, handbag and shoe categories saw strong growth. “We spent a lot of time discussing see-now-buy-now with our vendors,” Katz said, “and we saw a much better balance in assortment. [Products were] much less dependent on weather patterns, which is why women’s apparel improved.”
Fewer markdowns and more full-pricing selling also helped the group’s revenues: EBITDA increased to $123.5 million from $122.9 million in the first quarter of 2017, boosted by the higher gross margins.
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